| Item 1.02. | Termination of a Material Definitive Agreement. |
As previously reported, on March 21, 2021, Canadian Pacific Railway Limited, a Canadian corporation (the “Corporation”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Kansas City Southern, a Delaware corporation (“Kansas City Southern”), Cygnus Merger Sub 1 Corporation, a Delaware corporation and a direct wholly owned subsidiary of the Corporation (“Surviving Merger Sub”) and Cygnus Merger Sub 2 Corporation, a Delaware corporation and a direct wholly owned subsidiary of Surviving Merger Sub (“First Merger Sub”), which provided, among other things, that subject to the satisfaction or waiver of the conditions set forth therein (i) First Merger Sub would merge with and into the Kansas City Southern (the “First Merger”), with Kansas City Southern surviving the First Merger as a direct, wholly owned subsidiary of Surviving Merger Sub, and (ii) immediately following the effective time of the First Merger, Kansas City Southern would merge with and into Surviving Merger Sub (the “Second Merger” and, together with the First Merger, the “Transaction”), with Surviving Merger Sub surviving the Second Merger as a direct, wholly owned subsidiary of the Corporation. Immediately following the Second Merger, all of the stock of Surviving Merger Sub, as successor to Kansas City Southern, would be deposited into a voting trust subject to a voting trust agreement, pending final approval of the Transaction by the Surface Transportation Board (the “STB”).
On May 20, 2021, the Corporation announced that it would not make a counterproposal to acquire all the outstanding shares of common stock of Kansas City Southern in response to a competing proposal from Canadian National Railway Company (“CN”) that the Kansas City Southern board of directors had deemed a “Company Superior Proposal” (as defined in the Merger Agreement). On May 21, 2021, Kansas City Southern delivered to the Corporation a written notice terminating the Merger Agreement pursuant to Section 7.1(c)(ii) of the Merger Agreement in order to enter into a definitive agreement with CN (the “CN Agreement”). As a result, the Merger Agreement was terminated on May 21, 2021, and concurrently therewith, Kansas City Southern paid the Corporation a termination fee of $700 million in cash.
The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, which was filed as Exhibit 2.1 to the Current Report on Form 8-K that was filed with the Securities and Exchange Commission by the Corporation on March 22, 2021, and is incorporated herein by reference.
On May 21, 2021, the Corporation issued a press release announcing its intention to (i) proceed to prepare and file its application before the STB seeking authority to control Kansas City Southern and its U.S. rail carrier subsidiaries, and (ii) be available to re-engage with Kansas City Southern in the event that the CN Agreement is terminated or CN is otherwise unable to acquire control of Kansas City Southern. A copy of the press release is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
